The risk-free rate is 2.5%, the market risk premium is 6.4%, and the stock's beta is 1.28. What is the cost of common stock using the CAPM equation?
The risk-free rate is 2.5%, the market risk premium is 6.4%, and the stock's beta is 1.28. What is the cost of common stock using the CAPM equation?
Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
7th Edition
ISBN:9780357033609
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Chapter12: Investing In Stocks And Bonds
Section: Chapter Questions
Problem 4LO
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General accounting

Transcribed Image Text:The risk-free rate is 2.5%, the market risk premium is 6.4%, and
the stock's beta is 1.28. What is the cost of common stock using the
CAPM equation?
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